The global financial crisis and the current political events across the Arab region are a testimony of the urgent need for an alternative but complementary source of finance to the traditional capital markets and commercial banks. In particular, as regional corporates begin to re-invest and develop their businesses to tap into the broader regional long-term economic growth story, the lack of funding is emerging as a key challenging issue, mainly for many quality organisations.
Structurally, the regional financial markets have been severely underpenetrated relative to global standards. According to the Global Financial Stability Report released in April 2012 by the International Monetary Fund, the total size of Mena equities, bonds and bank assets amounted to around 113 per cent of GDP, compared to emerging market and World averages of more than 200 per cent and 400 per cent respectively. Such statistics evidence the traditional sources of finance still have a large funding gap to bridge.
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